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Federal Register / Vol. 86, No. 101 / Thursday, May 27, 2021 / Notices
about 35% of the domestic property &
casualty P&C insurance sectors total premiums of $711 billion. Auto ownership is associated with greater opportunity for economic well-being, such as better access to employment opportunities.1 All U.S. states except for New Hampshire require a driver or owner of a motor vehicle to have auto liability insurance or financial security, which may be satisfied by auto liability insurance, when registering or while operating a motor vehicle. However, in 2019 nearly 13% of drivers in the United States were uninsured.2
The domestic personal auto insurance business has been evolving throughout the 21st century. New consumer preferences and recent technological innovationsincluding the increased use of big data and artificial intelligencehave led to changes in nearly all aspects of the business, including availability of products, pricing, underwriting, distribution, claims adjudication and processing, and risk management. Additionally, developments in the sharing economy such as ride-sharing and delivery services and automation are likely to further reshape the business in the future. The COVID19 pandemic accelerated some of these changes, such as an increased consumer preference for usage-based insurance and telematics, which could permanently alter the sector.

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FIOs Previous Work on Auto Insurance Title V of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established FIO within Treasury and authorizes FIO to, among other things, monitor the extent to which traditionally underserved communities and consumers, minorities, and lowand moderate-income LMI persons have access to affordable insurance products regarding all lines of insurance other than health insurance.3
In 2014 and 2015, FIO issued two public notices soliciting comments relating to monitoring the affordability 1 FIOs previous work on auto insurance affordability discusses these issues in greater depth.
See Federal Insurance Office, U.S. Department of the Treasury, Study on the Affordability of Automobile Insurance 2017, https
home.treasury.gov/system/files/311/
FINAL%20Auto%20Affordability%20Study_
web.pdf.
2 Insurance Research Council, One in Eight Drivers Uninsured, news release, March 21, 2021, https www.insurance-research.org/sites/default/
files/downloads/UM%20NR%20032221.pdf.
3 FIO Act, 31 U.S.C. 313a, c1B. Title V also designates the Secretary as advisor to the President on major domestic and international prudential policy issues in connection with all lines of insurance except health insurance. Id. at sec.
321a9.

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of personal auto insurance for traditionally underserved communities and consumers, minorities, and LMI
persons collectively, Affected Persons.4 FIO then issued a notice in 2016 detailing a proposed methodology for examining the affordability of personal auto insurance 2016 FIO
Notice.5 The 2016 FIO Notice also indicated that FIO would use available data from the Census Bureau, statistical agents, and certain states for an initial affordability study, the 2017 FIO
Affordability Study.6 In addition, FIO
indicated that for a subsequent study in 2017 following the 2017 FIO
Affordability Study, FIO would request large auto insurers i.e., those having a statutory surplus greater than $500
million and annually collecting more than $500 million of premium for personal auto insurance to voluntarily provide to the statistical agents with which the insurers typically work the following information: i ZIP Codelevel premium data; ii for liability coverage at the financial responsibility limit; and iii for the voluntary market.7
Although FIO did not proceed with this voluntary data call to large auto insurers, it has continued to monitor auto insurance market developments, as noted in its recent Annual Reports.8
Additionally, FIOs Federal Advisory Committee on Insurance FACI has considered issues related to personal auto insurance.9
The 2017 FIO Affordability Study sought to provide quantifiable information on auto insurance affordability for Affected Persons. The data examined by FIO for the 2017 FIO
Affordability Study did not include all U.S. auto insurance policies. Instead, it was based on ZIP Code-level premium data that was voluntarily provided by several U.S. states and a statistical agent.10 The 2017 FIO Affordability Study calculated and reported data 4 79 FR 19969 Apr. 10, 2014, 80 FR 38277 Jul.
2, 2015.
5 81 FR 45372 July 13, 2016.
6 81 FR at 45381.
7 81 FR at 45381.
8 See, e.g., Federal Insurance Office, U.S.
Department of the Treasury, Annual Report on the Insurance Industry 2020, 2627, 3132, 35, https home.treasury.gov/system/files/311/2020FIO-Annual-Report.pdf.
9 See, e.g., Federal Advisory Committee on Insurance, Minutes of the Federal Advisory Committee on Insurance September 29, 2020, https home.treasury.gov/system/files/311/FACIMinutes-9-20.pdf.
10 With some state-specific exceptions, P&C
insurers generally are required by state law to send premium, claims, and loss data to statistical agents, who then compile the data for state insurance departments. The states, in turn, use the reported information to ensure that insurance rates meet statutory standards and to monitor the insurance market.

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based on an Affordability Index, which is the ratio of the average annual written personal auto liability premium in the voluntary market to the median household income based on U.S.
Census Bureau data for U.S. Postal Service ZIP Codes in which Affected Persons were 50% or more of the population. The 2017 FIO Affordability Study indicated that approximately 18.6
million Americans live where auto insurance costs more than 2% of median household income.
Recent Attention on Auto Insurance In 2020, the House Appropriations Committee recommended that FIO
examine the impact of non-driving related factors, such as a consumers credit history, homeownership status, census tract, marital status, professional occupation, and educational attainment, on the affordability of auto insurance premiums for traditionally underserved communities. 11 President Biden also noted differences in personal auto insurance pricing in a televised Town Hall meeting on February 16, 2021.12
FIOs Upcoming Analysis of Auto Insurance Building upon its past work, FIO is issuing this RFI as part of a holistic analysis of the domestic personal auto insurance business, focusing on the following key themes:
1 Affordability of coverage and premium pricing disparitieswith particular attention to traditionally underserved communities and considering the impact of non-driving factorsincluding an analysis of available data and an update of FIOs past work on auto insurance, and 2 market evolution and structural shifts in the conduct of business, including the effects of technology and the use of big data, as well as changes related to the COVID19 pandemic.
II. Request for Comments FIO invites comments on the following questions:
Data Analysis 1. Please provide your views on FIO
updating its 2017 FIO Affordability Study. How could the 2017 FIO
11 U.S. House of Representatives Committee on Appropriations, Report together with Minority Views to Accompany H.R. 7668 116th Congress, 2nd Session, https www.congress.gov/116/crpt/
hrpt456/CRPT-116hrpt456.pdf.
12 President Joseph R. Biden, Jr., Remarks by President Biden in a CNN Town Hall with Anderson Cooper, remarks, CNN Town Hall, Milwaukee, WI, February 16, 2021, https
www.whitehouse.gov/briefing-room/speechesremarks/2021/02/17/remarks-by-president-bidenin-a-cnn-town-hall-with-anderson-cooper/.

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